KARACHI: The stock market took investors by surprise on Wednesday as the KSE-100 index surged by 964 points (2.42 per cent) — the second highest single-day gains witnessed this year — to close at 40,898 points.

After a somewhat slow start the index gained momentum. Attractive valuations in an oversold market brought back the investors who threw caution to the winds as greed overpowered fear. The participation by investors was represented by traded volume which jumped to 248m shares, showing an increase of 75pc over the previous day.

Investors seemed to take heart from the stabilisation in rupee following sharp declines earlier in the week. The approaching date of elections without any talk of postponement was also encouraging as the market was comforted by the fact that fresh elections would mark full five-year completion of a civilian government for the second time, hinting that the country had at last hit the road to democracy.

Banking stocks were greatly in demand and continued to gain ground as market expected further hike in interest rates in the next monetary policy. Similarly, cement and fertiliser sectors extended their rally into second day on reports of increase in prices to cover the highest cost of production after rupee devaluation.

The two sectors made cumulative contribution of 426 points to the index.

On the cement sector, D.G. Khan, Maple Leaf, Cherat, Pioneer and Kohat Cement hit their upper circuits.

Besides banks which contributed 295 points and cement adding 131 points, fertiliser were up 121 points, E&P 92 points and O&GMCs 70 points. Among stocks, the major gainers were Habib Bank 3.92pc, UBL 4.48pc, Lucky Cement 4.19pc, Engro Corp 2.22pc and FFC 2.47pc. On the flip side, Nestle fell 3.98pc and Philips Morris Pakistan 5pc taking away 29 points.

Published in Dawn, July 19th, 2018